Los Angeles daily herald., 1887-12-07

feared that the withdrawal of this
great sum of money needed by the
people would so affect the business OF
the country, that the sum OF $40 S64, :
100 of such surplus was applied to
the payment of the principal and in
terest of the 3 per cent. bonds still
outstanding. and which were then
payable at the option of the govern
ment. The precarious condition Of
financial affairs among the people
still needing relief, Immediately after
the 3Oth day OF June, 1887, the
remainder of tn. 3 per cent.
bonds then outstanding amounting
with principal and interest to the sum
of Sis, S77 500, were called in and APP
piled to the sinking fund contribution
for the current fiscal year. Notwith-
standing these operations OF the Teas
ury Department,
REPRESENTATIONS OF DISTRESS
In business circles not only continued
but increased and absolute peril
seemed at hand. In these circum-
stances the contribution to the sinking
fund for the current fiscal year was at
once completed bv the expenditure OF
$27, 634 ,2S3 56 in the purchase of gov
eminent bonds not yet due, bearing
four and four and half per cent.
interest, the premium paid thereon
averaging about a per cent. for the
former and S per cent for the latter.
In addition to this, the interest account
accruing during the current year upon
the outstanding bonded Indebtedness
OF the Government, was to some eX-
tent anticipated. and banks selected
as repositories of public money were
permitted to somewhat increase their
deposits; but the eXpedients thus en-
ployed to release to the people the
money lying in the Treasury served
only to avert immediate danger, and
our surplus revenues have continued
to accumulate, the excess for the
present year amounting on the 1st day
Of December to $50, 25S,S 7l. 10.
and is estimated TO increase in the
sum of $1,000 090 by the 30th OF
June next, at which date it is ex-
pected that this sum, aided to prior
accumulations, will swell the surplus
in the treasury to $40, 900 900. There
seems to be no assurance that with
such withdrawal from use of the
peoples circ'llative medium. our
business communities may not in the
near future be subjected to the same
distress which was quite lately pro-
ducrd from the same cause, and
while the functions OF our national
treasury should be few and simple.
and while its best condition would
he reached. believe, by its
entire dIsconnection with private bust
ness interests, yet when, by perver-
sion of it's purposes, it idly holis
money uselessly substracted from the
channels of trade, there seems to be
REASON FOR THE CLAIMS
That legitimate means should be de-
vised by the government t restore, in
the emergency, without waste or ex.
travagance, such money to its place
among the people. Ii such an emer.
gency arises, there now exists no clear
and undouhte executive power of re
lief. Heretofore the redemption OF
the per cents only, which were pay.
able at the option of the gov.
eminent, has afforded a means
for the disbursement of the excess OF
our revenues; but these bonds have
all been retired and there are no
bonds outstanding, the payment OF
which we have the right to insist
upon The contribution to the sink
ing fund, which furnishes the 6cca-
sion for expenditures in the purchase
of bonds, has been made for the
current year, so there is no outlet in
that direction. In the present state
Of legislation the only pretense of any
existing executive poaer to restore at
this time any part Of our surplus
revenues to the people by it's ex-
pen iture, consists in the supposition
that the Secretary of the Treasury may
purchase the bonds OF the Govern
ment not yet due. at rate OF premium
to be agreed upon. The only provision
of las from which such power could
be derived, is found in an apnropria-
ton bill passed number of years
ago, and it is subject to the supposi
ton that it was intended as temporary
and limited in its application, instead
of comforting a continuing discretion
and authority. No condition ought to
exist which would justify the grant OF
power to single official to upon his
judgment OF necessity, withhold from
or release to the business OF tue peo-
pie in an unusual manner, money held
in the Treasury, and thus affect, at
bis will,
THE FINANCIAL SITUATION
OF the Country; and if it is deemed
wise to lodge in the Secretary of the
Treasury the authority in the present
juncture, to purchase bonds, it should
be plainly vested and provided, as
far as possible, with such checks and
limitations as will define h official
right and discretion, and at the same
time relieve him from un.
due responsibility in con-
sidering the question of purchasing
bonds as means OF restoring to cir
C lation the surplus money accumu-
lating in the treasury. 1t should be
no ne in mind that premiums must,
OF course, he paid upon such pur-
chase, that there may he large part
of these bonds held as investments
which cannot be purchased at any
price, and that com bina ions among
holder, who are willing to sell may
enhanc, the cost OF such
bonds to the Government. 1t has
been suggested that the present bond
ed debt might be refunded at a less
rate of interest and the difference
between the old and new securities
paid in cash, thus finding use for the
surplus in the treasury. The sue
cess of this plan, it is appar-
ent, must he founded upon the
voli'ion OF the holders of the pres
ent bonds, and it is not entirely
certain that the inducement which
must be offered them would result in
more financial benefit to the govern
ment than the purchase of the bonds,
while the latter proposition W, uld re-
duce tie principal of the debt by ac-
tual payment instead of extending it.
The proposition to deposit the money
held by the government in banks